Well, Dave showed them. He found a way to be able to take deposits and then loan them out to local people and the business community. He had to dabble in a few things first of all though. Gambling. That’s what banks do is it not.
The gambling centre of the world is of course Las Vegas, it’s an interesting place with lots to see or do, photo opportunities galore and of course a bit of sleaze throw in. Dave hit Las Vegas and the tables. Black jack being his first stop. All of the casinos offer explanations of how each game is played and how you should play, normally around 11.00 am each morning you can wander down to the tables and enjoy some tuition.
What they don’t tell you of course is that the house never looses. In fact black jack played with a full table rarely looses any money for the house at all. Some players win a bit and some lose a bit more and the difference goes into the bank. Simples. Dave got stuck in and demonstrated how high street banks lose money by gambling in various ways.
Then he went to another capital of gambling, New York and its stock exchange. He made close to a 3% profit on that form of gambling but this was on a good day. But he demonstrated how it was little more than slightly educated hunches that dealers used to bet on stocks. It’s really more like horse racing. Read the form and get some good info and then risk your money. The only real way to win on the stock market is to follow the Warren Buffet way. Invest in with the big players (IBM, BP, Coke, etc.) for the long term.
Anyway, Dave introduced his mobile bank, using a coverted old mini-bus, took it to London and parked it outside the Bank of England. He used a megaphone to get over his message of offering of 5% interest on deposits which no other bank in the UK gets anywhere near. The police came eventually and had a word, nothing too heavy, there were TV cameras to consider.
He also invested in gold and property, both of which appreciated in value over the course.
So Dave demonstrated that it could be done. You could start a small bank and make it work. He made a profit after six months, which he gave to local charities. Vince Cable offered his support to help Dave achieve real bank status. Why? Because there is a place for local banks serving local communities. But also because Dave has still only set up a savings and loan bank rather than a real bank which is still a wonderful success. A saving sand loans bank, you’ll have heard of those and seen what can happen if they hit a snag. You haven’t heard or seen one? Have you never seen “It’s a wonderful life”, often rated the best film ever made? It’s on most Christmas’s.
The banks we have at the moment are, and have been for a very long time, risk averse. That is they do not take risks. Well they don’t take risks when they are lending to people and small businesses. If they lend money it’s on the basis that if you default hey will get their money or ruin you in the process of trying to. If you are a small business you have to provide security i.e property or valuables which are greater than the debt you are taking on. Sometimes they place security on your home which they will not remove after you have paid them back just in case you end up owing them money again in the future.
They are not interested in small businesses. In most cases their managers have no idea how small businesses work but hey, they make decisions on loans and overdrafts based on regulations and policies of their bank. None of which are designed to protect or help anyone apart from the bank.
The biggest message that has come across from Dave is that you can beat the system although perhaps not in the longer term. Maybe the same type of approach could be made to look at the sham of our democracy, the lack of justice in the legal system and the lack of control of our local councils and so on and so on.
There’s a lot of work to be done. It will take a long time to sort things out. It took is a long time to get to this point.